I second that vote for GoodReader. Lots of features - far too many to list, but reading PDFs is one of its core strengths. As the previous respondant pointed out, you can freely annotate apps with 'sticky notes' and all sorts of other 'free hand' drawings. They are all integrated into the resulting PDF file and will render correctly if you move them off the iPad to a PC. (It offers to keep a backup file too). You can keep files in folders - move them on and off your PC either via USB or WiFi, move a file at a time, a folder at a time or flag files for transfer. It can sync via cloud servers, such as Apple's MobileMe iDisk..and it's cheap and well-supported. Just read the reviews at the Apple App store.
GoodReader also moves any other files (i.e. not just PDFs) onto your iPad - so movies, photos, 'Office' documents, zip files - basically anything....
Great product, well supported, well engineered and at a stunning price.
Tim
Scotland